Ever since the scam in Karuvannur Cooperative Bank of Kerala has come to light, Nafcub President Jyotindra Mehta has turned sad due to the fact that the news item has dented the reputation of the co-operative movement.
Mehta phoned Indian Cooperative to convey that the said bank (Karuvannur Cooperative Bank) is not a bank and has no RBI licence to run an urban cooperative bank. “It is actually a credit society and not a bank, ” Mehta was emphatic.
Partially blaming RBI for no action in the matter, the Nafcub President wondered why RBI takes no action in such cases when a credit co-op uses the name of a bank and suffixes the word “Bank” in its name.
“There are clear-cut guidelines that no entity can use the tag bank unless the Regulator (RBI) gives it a licence and authorizes it to use the tag-bank”, underlined Mehta. Such rampant use of the tag and subsequent hanky-pankies indulged in by them leads to general rejection of co-op banks…